U.S. Secretary of State Hillary Clinton said on Wednesday the United States would refuse to deal with or fund a Palestinian government that included Hamas unless it met three international conditions.

"We will not deal with nor in any way fund a Palestinian government that includes Hamas unless and until Hamas has renounced violence, recognized Israel and agrees to follow the previous obligations of the Palestinian Authority," Clinton told the House of Representatives foreign affairs committee.

Clinton also said the United States believed its decision to seek to engage Iran over its nuclear program and other issues would
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ncrease its leverage to impose sanctions if talks fail.

"We actually believe that by following the diplomatic path we are on, we gain credibility and influence with a number of nations who would have to participate in order to make the sanctions regime as tight and crippling as we would want it to be," Clinton told U.S. lawmakers.

Meanwhile, an aide to Mahmoud Abbas said Wednesday that the Palestinian Authority leader would meet with U.S. President Barack Obama in Washington on May 28.

Abbas wants the U.S. to persuade the new Israeli government to accept a two-state solution - namely, separate Israeli and Palestinian states living alongside each other in peace, Nabil Abu Rudeineh said. Abbas also wants the U.S. to persuade Israel to halt its settlement construction, according to Rudeineh.

Israel's new hardline government has balked at supporting the creation of a Palestinian state, and Prime Minister Benjamin Netanyahu has said he plans to keep building in settlements.

On Tuesday, Obama said he expected Israelis and Palestinians to make gestures of good faith within months to revive the languishing Mideast peace process.

The White House said Netanyahu would visit Washington in the next few weeks and that Obama planned to host Egyptian President Hosni Mubarak, as well, for further talks on Middle East peace.

The United States is interested in promoting the peace process through a series of confidence-building gestures between Israel, the Palestinian Authority and Arab states, a senior American official who declined to be named told Haaretz.